Melbourne consortium launches tender for large-scale renewable energy plant

A City of Melbourne led plan to develop a large-scale renewable energy plant – and then sell the electricity to under long-term contract to a select group of large-scale energy users – is underway, with a call for tenders advertised nationally on Wednesday.
The Melbourne Renewable Energy Project – a collaboration between the City of Melbourne, Australia Post, NAB, the University of Melbourne, RMIT, NEXTDC, Zoos Victoria, the City of Port Phillip, Moreland City Council, the City of Yarra, Citywide, Melbourne Convention and Exhibition Centre and Bank Australia – was first floated in November 2014, at which time it the first Australian example of a group of large-scale energy users proposing to buy utility-scale renewable electricity through a group purchasing model.
Melbourne Renewable Energy Project infographic
Since then, similar projects have cropped up in New South Wales, with a state government tender for 137GWh of renewable energy for its Sydney Metro Northwest rail project, and in Queensland, with a tender from the government-owned utility Ergon Energy for 150MW of renewables.
The tender for the Melbourne Renewable Energy Project, released by Procurement Australia, is seeking responses from new renewable energy projects that are shovel-ready and have planning approvals in place.
The successful tenderer will build and operate the plant in regional Australia – a task that is expected to create up to 140 jobs in the construction phase, and a number of ongoing jobs in the plant’s operation and management. Once the winning tender is selected, each member of the purchasing group will enter into a long-term electricity supply contact for renewable energy spanning at least 10 years.
At this stage, the group expects it will purchase 110GWh of energy – the equivalent to a 15-turbine wind farm, or a 250,000 panel solar farm – enough to power more than 28,000 households in Melbourne for a year.
“We are challenging the market to supply us with the right energy at the right price,” Melbourne Lord Mayor Robert Doyle said in a statement. “If the market responds effectively, we will see a new renewable energy plant constructed within the next two years.”
Councillor Arron Wood, who is chair of the City of Melbourne’s Environment Portfolio, said the purchasing group expected considerable interest from companies in the renewable energy sector.
“This is about creating the jobs of the future, supporting innovation and diversifying Melbourne’s energy supply,” he said.
“Together, we’re finding a new way to drive investment in renewable energy in Australia. By pooling our electricity demand we will achieve enough scale to enable a new renewable energy plant to be built.”
“The fantastic thing is that the direct renewable energy purchase model is replicable. We’ve already had strong international interest from local governments around the world about using the model to accelerate the transition to renewables.”
“It’s hugely exciting to have reached this point after more than two years developing an entirely new avenue to directly invest in renewables. This really mixed group of local governments, large corporates, enterprises and leading research institutions will be able to point to a real, on-ground project that we’ve come together to help build.”
Green group Friends of the Earth said on Wednesday that the local government-led tender – which will help the City of Melbourne hit is renewable energy target of 25 per cent by 2018 – was a “welcome act of leadership” after the damage done to the large-scale renewables sector at a federal policy level.
“While the initiative will spur on the renewable energy sector in the short term, Victoria still needs a comprehensive state government policy to get the sector back on track,” said FOE renewables spokesperson Leigh Ewbank.
“The community is calling out for Premier Daniel Andrews to put Victoria on a pathway to 100 per cent renewables. Adopting a strong 2020 target is the first step on that path,” said Ewbank.
Recently released Friends of the Earth research showed Victoria could achieve at least 30 per cent renewable energy 2020 by building the wind farms that are on the books and maintaining a medium projection of solar growth.
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